OK, that didn’t quite have the gravitas I was going for. The point is that China’s New Year’s holiday week is over and the dominant organization of China’s film industry, China Film Group, has a new Chairman, La Peikang (喇培康).

La’s appointment to the PRC’s top film job signals a new direction and some interesting potential changes in the years ahead, both for Chinese filmmakers and distributors and their overseas counterparts. Namely, La’s extensive international experience overseas and in China’s co-production bureaucracy point to a likely increased focus by CFG on international cooperation and expansion.

Variously described by those who know him as “serious,” “educated and academic,” “quietly effective,” “well-liked” and “outward looking,” La could scarcely be more different than his predecessor, Han Sanping.

In the role he held for ten years, Han Sanping was a hustler, a mover-and-shaker who presided over the massive rise of China’s film industry from its status as a tiny backwater with a mere 0.7 percent share of the global box office in 2003 to its emergence as the world’s most dynamic movie territory, with a 10 percent (and rapidly rising) share of the worldwide pie in 2013.

I remember the early days of his tenure when Han Sanping would show up in Hollywood unknown and barely acknowledged, begging for meetings with studio execs, agents, movie stars, anyone who would pay attention. Most dismissed him in those days as unworthy of their time, because China was so negligible as a territory, let alone as a potential source of financing. But Han’s “Baqi” (覇气) loosely translated as “lord’s air” or “domineering spirit,” drove him to oversee the incredibly rapid modernization of the Chinese market, with the construction of 16,000 new cinema screens and a corresponding 2,700 percent increase in domestic box office receipts. Nowadays, thanks largely to Han’s contributions, China is on everyone’s mind, and it would be difficult to find a serious agent or executive who doesn’t know his name.

Given the legacy that Han created, La will find that the tables have turned and that studio heads and movie stars will eagerly, if not desperately, court his favor. Those who meet him will experience a completely different breed of Chinese movie czar. In contrast to Han’s bulldog approach, La is a more sophisticated executive, a fluent English and French speaker who is apparently viewed by China’s leaders as the right person to lead their country’s movie business to maturity and, they hope, to increasing global influence.

Before his appointment was announced, few anticipated that La would be the one to win the top job. It’s not that he lacked credentials—he was Deputy Chairman of the SARFT Film Bureau, and he had previously run an important CFG subsidiary, the internationally focused China Film Co-Production Company. But other candidates were more in the public eye, perhaps because they were more effective at outwardly promoting themselves.

When it came down to it though, it was La’s connections, his political skills, and his perceived loyalty to his Chinese Communist Party bosses that ultimately allowed him to prevail. He was chosen for the job by the Party’s ultra secretive, extraordinarily powerful Organization Department (中国共产党中央组织部), China’s political king-making office. Richard McGregor of The Financial Times described the Organization Department’s status thusly:

“To glean a sense of the dimensions of the Organization Department’s job, [imagine] a parallel body in Washington…that would oversee the appointments of every US state governor and their deputies; the mayors of big cities; heads of federal regulatory agencies; the chief executives of General Electric, ExxonMobil, Walmart and 50-odd of the remaining largest companies; justices on the Supreme Court; the editors of The New York Times, The Wall Street Journal and The Washington Post, the bosses of the television networks and cable stations, the presidents of Yale and Harvard and other big universities and the heads of think-tanks such as the Brookings Institution and the Heritage Foundation.”

This Organization Department controls more than 70 million party personnel assignments across the country, and it is no small matter to win their approval for senior party roles like La’s. Although, as McGregor wrote, “their vetting process takes place behind closed doors and appointments are announced without any explanation about why they have been made,” it’s not difficult to imagine intense lobbying, backbiting, mudslinging, and all manner of political fisticuffs. And La would have had to pass intense scrutiny– the Organization Department has access to dossiers and background checking capabilities that put the CIA and NSA to shame.

So don’t let La’s quiet, academic demeanor fool you; he’s undoubtedly as tough and effective as they come in China’s political bureaucracy. And that’s saying a lot.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987.He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Strong word of mouth helped Gravity to float to a modest 36 percent decline in its second week, enabling it to fend off newcomer The White Storm and land its second straight win at the Chinese box office. Still going strong in its third week, Gravity should have no problem surpassing $70 million, even in the face of heavy competition from new Chinese openers.

This total would lock Gravity’s place as the 3rd biggest foreign release in China this year, behind Iron Man 3 and Pacific Rim. But it probably won’t be enough for the film to score a top 10 slot overall, as so many local films have performed well in 2013.

The Benny Chan directed action-crime thriller White Storm debuted to good but not great numbers, eking out a slim lead over Gravity during the past 3-day weekend, when they competed head-to-head. Blue Sky Studios’ animated adventure Epic fell far behind, mustering just $3.65 million in its 3-day weekend debut. The 7-month delay in Epic’s PRC release was undoubtedly a factor in its modest showing.

Escape Plan will finish up its PRC run with an impressive $41.5 million, nearly double its U.S. total. Considering all the love China has shown in recent years for Sylvester Stallone and Arnold Schwarzenegger, the movie’s sexagenarian stars, it will be a good idea for Hollywood to dust off its old two-hander action scripts and re-set them in China for this dynamic action duo.

For the first time since early September the weekly box office tally fell short of last year’s comps. Cumulative box office for the week ending December 1st saw a 7 percent decline to $58.5 million from the 63 million total in week 48 of 2012, when Life of Pi reigned.

Today saw the long-awaited debut of director Ning Hao’s No Man’s Land, an adventure thriller that has survived two major revisions and six aborted theatrical release dates over the past four years as DMG, CFG, Galloping Horse and the filmmaking team struggled to conform to the SARFT censors’ restrictions. Originally slated to release in 2010, the film stars the hugely popular Huang Bo and Xu Zheng, who co-starred in last year’s megahit Lost in Thailand.

With its excellent $3.5 million opening day, No Man’s Land should easily top Ning Hao’s prior personal record gross of $24.7 million for last year’s Guns ‘n Roses, though the director claims he doesn’t care how much the new film earns.

“If I wanted to make big money, I could have stayed at home (in coal-rich Shanxi province) and mined coal with my classmates, who are now all billionaires,” Mr. Ning said in a recent Wall Street Journal interview. I just want to do something that I like.”

Of course, what China’s theater operators would like is a big December for local Chinese pictures. With nearly 18,000 movie theater screens now in operation (35 percent more than at this time last year) and an average of 12 or 13 new ones opening every day, they are increasingly reliant on local films to help them pay off their investments.

November’s box office totaled $250 million, a 36 percent increase over 2012, and cumulative year-to-date box office now stands at $3.22 billion. If December’s revenue merely matches last December’s total—a distinct possibility given the tough comps established in 2012 by Lost in Thailand—then China’s total for 2013 will wind up just shy of $3.6 billion.

If, on the other hand, expected hits No Man’s Land, Personal Tailor and Police Story can each draw $80 million to $100 million in ticket revenue, then the year-end total could, just possibly, reach $3.7 billion.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987.He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

It’s happening so often in China these days that it’s difficult not to sound clichéd, but it was another record-breaking week at the national box office in the 7-day period ending May 5th.

So many records toppled that to list them all would fill up an entire column. To avoid making this article an overly long list, I’ll mention just a few.

First, at $148 million, last week’s cumulative PRC gross easily beat the all-time weekly record of $136 million that was set during Valentine’s Day week less than three months ago.

Although Iron Man 3’s $64 million 5-day gross fell about $10 million short of the all-time single week record that was set by last year’s Titanic 3D at $74.7 million—it did set new records for biggest midnight screenings total with $2.1 million, and biggest opening day with $19 million.

And The Croods became the highest-grossing original (that is, non-sequel and non-pre-existing franchise) animated film in China’s box office history, with a $36 million total as of Sunday.

So all of this is good for China and good for Hollywood, right?

Good for China’s producers and distributors, yes. For Hollywood, it’s hard to get too enthused. This past week was a positive blip in what continues to be a confounding and rather distressing trend for American studio films in China.

There’s no debating that Iron Man 3 is a solid success. Its PRC gross will roughly double the $60 million gross of the year’s second-best Hollywood release so far, Skyfall, and it will become the first Hollywood film in 12 months to reach $100 million.

But it still may not beat So Young, a melodrama from a first-time Chinese director with a production budget that was probably less than 3 percent what Iron Man cost. And So Young won’t even be among China’s top 5 grossers this year.

When you consider that Iron Man 3 is the biggest and best that Hollywood has to offer, that it enjoys the backing of a strong local partner in DMG and an unprecedented level of government support, yet it still struggles to beat a low-budget B-level Chinese language movie, you know something’s not working. Iron Man didn’t break the downward trend for Hollywood in China, rather, it’s the exception that proves the rule.

Chinese audiences like Hollywood movies, but they love Chinese ones. And that’s a major problem for Hollywood.

China’s box office is now up 41 percent year-to-date (36 percent in RMB terms) while North America is down by 11 percent. Chinese movies are getting better, and with $50+ million grosses now routine, they’re becoming much more profitable. Capital is attracted to ventures that offer profits, and Chinese movies, though tricky investments in some ways, are looking increasingly attractive.

Because Hollywood action movies like Iron Man remain extraordinarily expensive to produce, they need growth from overseas to compensate for their shrinking domestic market. China was supposed to be the solution to Hollywood’s math problem, but China isn’t cooperating. In the global market for film financing, U.S.-based projects are going to find it increasingly difficult to compete, unless they radically change their strategies.

1. Provide animated films and family fare. These genres have repeatedly gotten special dispensations from SARFT, enjoying prime distribution slots even during holidays and blackout periods.

2. Make local Chinese language films for low to moderate budgets. This is not easy, but at least it’s permitted, and as we’ve seen, a well-made Chinese film can generate windfall profits.

A third strategy, U.S.-China co-productions, remains extremely challenging, and it may still be a few years, if ever, before such productions become common. As Jiang Wei, general manager of Edko (Beijing) Films Limited, puts it:

“The Chinese film industry needs to grow for greater cooperation to be achieved. There is no real in-depth cooperation, in which staff from both countries work together, like what the English and Australian filmmakers have been doing in Hollywood. When China’s film industry grows as an equal partner and the box office becomes big enough, the Hollywood community will have to think of real stories involving Chinese culture and people who are real characters. Only then will real co-productions be possible.”

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987.He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

The PRC movie showdown between So Young and Iron Man 3 is now at hand. And what a showdown it is! The two movies combined couldn’t possibly generate as much drama, tension, and emotional angst as has the behind-the-scenes battle over IM3’s release date.

Although So Young has only just opened, and Iron Man 3 has yet to unspool in China, So Young has already won the battle, thanks to a relentless campaign by that film’s Chinese distributor Enlight to derail the Disney/Marvel/DMG machine. The story of the two films’ jockeying for position offers interesting (and somewhat damning) insight into how SARFT favors domestic movies over foreign ones.

Back in March it was announced that the romantic melodrama So Young and the Hollywood action tent-pole Iron Man 3 would open head-to-head on April 26th. This is an excellent date, just ahead of the three-day Labor Day/May Day holiday, when business is expected to be brisk.

As a local film, So Young’s debut on April 26th was locked. As a perceived foreign film, albeit one with a domestic Chinese investor and partner in DMG, Iron Man 3 was on shaky ground, subject to the indignities that several Hollywood movies have recently faced in China (see this article for a taste of how Hollywood movies have fared lately at the hands of SARFT).

After much lobbying by the producers of both films, and a confusing string of announcements by various parties about where Iron Man 3 would land, it now appears that the Robert Downey Jr.-starring action extravaganza has been granted a release at 12:01am on May 1st.

For So Young, this is great news. The low-budget romantic melodrama gets the holiday to itself, and five full days to rake in its spoils before the big budget Hollywood movie enters the scene. Indeed, early reports are saying that So Young has opened to an excellent $8 million Friday debut, and that it has a good shot at earning at least $100 million.

For Iron Man 3, the May 1st date has to be disappointing, but it’s much better than the May 3rd date that had been widely reported a few days ago. Never mind the rather silly assertion from “Deadline” that May 3rd was the date Disney and Marvel were “eyeing all along.” Why would anyone be happy to open just after a major box office holiday? That was pure face-saving spin, presumably from Disney’s PR folks. Credit DMG with fighting a nearly unwinnable fight and preserving at least one day of the holiday to bolster its debut.

Whether Iron Man 3 can overtake So Young and become the first Hollywood film in over a year to reach $100 million is an open question, but missing the first two days of the three-day holiday will certainly hurt its prospects.

According to ‘Firedeep’, my unfailingly reliable “deep throat” in China, Iron Man 3 was buffeted by a series of unexpected delays, which began with some late reshoots of its Chinese scenes. According to Firedeep, the locked print of the film wasn’t sent to the Film Bureau for technical censorship until the night of April 12th, which made the April 26th debut a rather iffy, although still perfectly possible, proposition.

Meanwhile, the translation and dubbing of the film ran into late hour delays when Marvel decided to replace the original translator.

But the biggest obstacle for Iron Man 3 emerged when So Young’s distributor, Enlight Films, decided to play the ‘local film protection’ card, putting up major resistance to its competitor’s holiday release date by appealing to China’s Film Bureau. It’s rumored that So Young’s celebrity director, Vicky Zhao, showed up at the Bureau and literally cried her way to sympathy and ultimate victory. The film authorities dithered and vacillated before finally announcing their ‘final’ decision about IM3 on Friday, causing great confusion amongst moviegoers and provoking howls of protest from Marvel’s Chinese fanboys.

As one sharp-tongued Chinese observer put it on a PRC film website, “Back and forth. This whole thing is a fucking mess. Fuck Enlight Pictures and fuck SARFT like every time.”

And as if to underscore the point, SARFT continued to torture Django Unchained by repeatedly approving and then un-approving that film’s re-release. On Thursday one announcement pegged Django’s theatrical revival for May 9th, and a day later it was supposedly pushed to May 12th. It’s death by a thousand cuts. Meanwhile many frustrated Tarantino fans have undoubtedly downloaded the uncensored BD-rip from pirate sites, leaving one to wonder whether any among them will still be waiting to buy theater tickets if and when the movie finally goes back up on the big screen.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987.He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

At this time a year ago American film producers and distributors had cause to be exuberant about China. The Chinese box office was booming, new theaters were opening at a rapid clip, and the grosses for Hollywood movies were going up, up, up. Whereas a $30 million gross would rank a film among the top 10 releases in China in 2010, in 2011 the top 10 threshold was $40 million, and in early 2012 $60 million became the new benchmark. American films were the primary drivers of this upward trend.

China had clearly fallen in love with Hollywood movies, and it seemed reasonable to expect that imported American tent-pole films would continue to ride the swelling box office wave. Pictures like Mission Impossible: Ghost Protocol ($102 million gross) The Avengers ($91 million) and Titanic 3D ($154 million) began fueling the expectation that $100 million totals would soon become routine.

In 2013 the wave has continued to roll, but somewhere along the way Hollywood got stuck in the shallows. China’s box office is still booming, and nearly 5,000 new screens have opened in the past 12 months, yet as Chinese language films have leaped ahead to $80 million, $120 million, and even $200 million grosses, American movies have drifted back to 2011 levels, when the Chinese market was half the size it is now.

Blame shifting audience tastes, blame government interference if you like, but whatever the reason, Hollywood’s releases in China have had trouble cracking $50 million in 2013. Only two U.S. films have reached that level this year: Skyfall at $60 million, and The Hobbit at barely $50 million. Others will certainly get there—G.I. Joe: Retaliation is a current possible candidate—but few if any will reach the numbers the U.S. studios were aiming or hoping for when they submitted their import applications to SARFT.

It’s not entirely clear at this point what Hollywood can do to reverse the trend. Co-productions might be one possible method for Hollywood to recapture market share, but whether China wants co-pros with big U.S. companies anymore is becoming a real issue. Even while announcements of U.S.-China tie-ups were flooding out of last week’s Beijing Film Festival, SARFT was dithering about whether to allow the biggest U.S.-China film collaboration in history, Iron Man 3, a favorable release date during the upcoming Chinese Labor Day/May Day holiday. If such a major, high profile joint-venture can’t get equal treatment with local movies, then the whole idea of the value of U.S.-China co-productions must be called into question.

For only the fourth week out of 16 this year, a Hollywood film carried the top spot in the Chinese box office rankings. G.I. Joe: Retaliation ran up $33 million in its 7-day opening week, a good showing given the above-mentioned lowered expectations for Hollywood films in general. G.I. Joe slowed down considerably on Monday and Tuesday of this week, with less than $4 million over those two days, so it’s still uncertain that it will reach the $50 million mark.

Dreamworks Animation’s The Croods opened soft with $6.2 million in its first two days, signaling a probable final gross of less than $20 million. This is consistent with China’s pattern of giving short shrift to original animated features. Mostly it’s the sequels and pre-sold animation franchises like The Smurfs that bring in the big bucks in the PRC.

As I had predicted, aggregate national revenue in Week 16 fell short of the total for the same week last year, but not by much, which bodes well for the weeks ahead.

Year-to-date box office sales in China surpassed the $1 billion mark last Saturday, more than a month earlier than it reached that milestone last year. It won’t be a surprise if the PRC posts another 40 percent annual increase in 2013.

Since Iron Man 3 now looks unlikely to bow on its originally intended April 26th release date, the youth romance So Young should open big on Friday without much competition to impede it. Although a few of my Chinese friends think the film’s melancholy tone will dampen its grosses, most believe the film’s star appeal and excellent early reviews will drive it to blockbuster numbers. Check in later this week for more about So Young.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987.He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Follow me on Twitter @robcain or Sina Weibo @robcain, or connect with me on LinkedIn.A Chinese filmgoer appears to have a gun to his head for merely thinking about going to see Django Unchained.

By Robert Cain for China Film Biz

April 11, 2013

For a brief moment there it looked like China’s film authorities had taken an important and welcome step forward in loosening their censorship policies by allowing the theatrical release of Django Unchained. When news came out last month that the blood-spattered Tarantino film had been approved for an April 11th theatrical debut, many Chinese moviegoers and observers like me were encouraged that the censors’ strict barriers to violence and sexually suggestive material might be coming down at least a little.

No one expected Django Unchained would be shown in China completely intact; it was a marvel that it would be released at all.

But in a rather bizarre and disappointing move on Thursday, SARFT canceled the film’s release on its very first day. In some theaters the film had actually started playing when the projectors were turned off less than sixty seconds later. What legions of Django’s film adversaries failed to do, China’s censors managed to pull off in only a minute: they killed him.

SARFT explained only that the release was canceled for “technical reasons.” They are unlikely to provide any further insight, leaving China’s moviegoers to speculate about what really happened.

Much of the talk in China’s online film forums has centered on the film’s violence and nudity. The Chinese government censors movies before they can be released, and scenes that contain nudity, politically sensitive issues, or graphic violence, must be edited out before a film can receive a go-ahead from the authorities.

The Chinese publication IBTimes noted in this article that even after the censors’ cuts, a couple of scenes remained in the distribution prints that must have been inadvertently overlooked. One of those scenes is a long shot in which Jamie Foxx’s penis can be briefly but clearly seen. In the other Kerry Washington’s nipple can be glimpsed. As an online observer with the handle “Bob Violence” noted “With all the fuss over the violence, maybe someone forgot about the nudity.”

One internet wag in Shanghai with the handle “Alexbenetta” quipped “The government are agitated about the failure of castration of Django in the movie so they decided to do it themselves.”

Another observer, my Beijing-based friend “Firedeep,” speculated that “the sudden last-minute blocking of Django Unchained has a lot to do with the unwillingness of SARFT to see a [ratings] system getting further actively discussed, which is always a sensitive and inconvenient subject for them. Drug War, a drug enforcement themed film which was released last Tuesday has already stirred up some notable talk amongst the public regarding SARFT censorship and demands for the launch of a ratings system. With the coming of the Beijing International Film Festival next week, topics about films will predictably go even hotter. So it is reasonably argued that SARFT blocked Django Unchained to avoid any further heating up of these movie-ratings discussions.”

To which another observer “Polylove” replied “Whatever their intention was, now it backfired. Talk about Django Unchained‘s censorship raised more attention from people.”

Hu Xijin, editor-in-chief of the Global Times, a newspaper run by the People’s Daily, wrote on his microblog: “The harm created by the act (of suddenly suspending the screening of the film) will be much greater than what may be brought by some ‘dangerous scenes’ to the nation’s politics.” Hu said some authorities have frequently made questionable decisions at the expense of the government’s credibility.

2) Shortest screening time (closed in less than 11 hours after midnight opening).

There’s been no word as to whether the “technical reasons” would be addressed or whether Django’s release would be reinstated. The unfortunate and rather ironic reality is that disappointed would-be theater ticket buyers in China will instead wind up watching the uncensored version of Django via internet piracy sites or pirated DVDs.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Two thoughts on all the media speculation about whether Iron Man 3 will get official co-production approval from SARFT for its China release this spring:

It won’t, in my opinion.

I doubt that Disney, Marvel and DMG—the film’s backers—really care.

A while back Disney, Marvel and DMG had to decide whether to comply with the strict SARFT co-production rules, or to sacrifice some of the benefits of official co-pro status and instead optimize Iron Man 3’s potential for the global market. Not surprisingly (as was revealed by a flood of press coverage that included some untimely revelations at last summer’s Comic-Con), they decided on the latter approach, making a film broadly aimed at the global audience.

Although they shot scenes in China last December with local actors—most notably the venerable Wang Xueqi and even a rumored appearance by movie diva Fan Bingbing—the partners’ overall creative and business approach precluded full adherence to the co-production rulebook. Namely, their strategy made it impractical to hire enough Chinese citizens to comply with the rule requiring that one-third of “major actors” be Chinese nationals, and they didn’t incorporate the requisite level of Chinese cultural content to qualify the film as an official co-pro under the Chinese guidelines.

But by working closely with the Chinese government, the co-producing partners have already secured many of the benefits they would have received with official co-pro status. These include:

Iron Man 3 will almost certainly enjoy a rare day-and-date release, perhaps even a pre-U.S. release date. Current chatter on China’s movie blogs and chat sites has speculated that the film will release in China in April, before its May 3rd U.S. debut.

The Chinese government has allowed the parties to promote the film since April of last year, whereas most U.S. imports only get a 2-3 week marketing window prior to release.

IM3 has enjoyed a high degree of media access in China, at a level usually reserved only for high-profile local films. This has included various web and digital promotional activations; uncensored “leaks” of photos and news items to the national press; and an unprecedented promotional segment on the most watched TV program of the year, CCTV’s annual Chinese New Year Gala.

They managed to work in a smart show of goodwill toward China on the Gala program by presenting the “Iron Man Hero Award” to a young Chinese boy who committed a heroic act worthy of Iron Man’s approval, as pictured below.Though no one at Marvel, Disney or DMG are talking publicly about their plans for IM3 in China, I’ve confirmed through other sources that they’re planning a major worldwide premiere for the film in Beijing, something that has rarely if ever happened before for a major U.S. studio.

The one major thing that these three companies presumably won’t get is the full 43 percent rental fee that comes with co-production status. But with all the other promotional consideration and support they’re receiving, by my estimation they’ve positioned the film to very likely become one of the top 3 U.S. films in China this year. Given the way things have been going for U.S. action films in China lately, that’s a very big advantage indeed.

In any case, for Disney and Marvel theatrical revenue is only a small part of a bigger picture that includes their interests in the Shanghai theme park and their consumer products business in China, both of which I expect will benefit nicely from the exposure and interest they’ve generated in the Iron Man franchise.This is exactly the sort of hustle and outside-the-box thinking that are required to ride the China wave. If Disney keeps up this level of focus and commitment to the market, this could be the year they win bragging rights as the top-grossing U.S. studio in China.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Although business at China’s movie theaters cooled off a bit last week compared to the prior week’s scorching, record-crushing $135 million gross, attendance was still hot enough to make it the second best week in Chinese cinema history. The $95 million cume for week 8 was 163 percent higher than the total for the same session in 2012.

Journey to the West led the way with $54 million, the second best second-week showing ever for a Chinese film, after Lost in Thailand’s Christmas week bonanza. At $160+ million and going strong as of this writing, Journey to the West looks certain to knock Lost in Thailand off its throne as the highest grossing Chinese film ever.

The Hobbit: An Unexpected Journey, took second place with an $18.5 million 3-day weekend. Some have suggested to me that The Hobbit’s underperformance in China is attributable to the fact that few there have read J.R.R Tolkien’s classic Middle Earth novels, but this explanation ignores the fact that The Lord of the Rings was a big hit in China back in 2004, placing fourth among all theatrical releases and first among foreign films that year.

The romance Say Yes came in third with a so-so $8.4 million, off by 56 percent from its first week’s tally. Jack Reacher was just behind with a tad under $8.3 million, bumping its 9-day cume to a modest $13.3 million.

Cloud Atlas finished the week with $26.3 million , just shy of its final North American gross of $27 million. With just a few more days before its run ends, it will be a close call as to whether the film will gross more in China than stateside. Either way, Cloud Atlas will wind up earning a remarkable 20 percent of its worldwide total in Chinese multiplexes.

Year-to-date, PRC box office receipts are up a scorching 43 percent over the same period last year. U.S. films account for just 16 percent of the total, compared to 47 percent during the same period in 2012. Even more worrisome is Hollywood’s market share tumble from 70 percent in the month of February, 2012, to 15 percent during February of this year. Whereas SARFT and the Chinese film authorities reacted to Hollywood’s dominance last year by imposing an extended summer blackout, they now appear to be loosening their grip a little, reportedly granting a coveted day-and-date release slot in late March to GI Joe: Retaliation.

The next U.S. film to release in China will be multiple Oscar winner Les Miserables, on Thursday the 28th..Musicals don’t usually attract much business in China–so I doubt Universal will be expecting much business here.

The next two major releases after Les Miz, A Good Day to Die Hard and Oz: The Great and Powerful, both set to release in mid-March, will serve as revealing litmus tests. Die Hard would normally be expected to attract China’s huge action fan audience, but as we’ve seen, American action tent-poles have underperformed of late in the Middle Kingdom. As a 3D fantasy, Sam Raimi’s Oz is also of a genre that traditionally excels in China, Hobbit notwithstanding. The classic 1939 MGM favorite is well-known and well-liked there. If any one movie can turn things around for Hollywood, I’m betting Oz will be it.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Over the years one of the most reliable truths of China’s film business has been that Hollywood action films sell. Bond films Casino Royale and Quantum of Solace, the Transformers movies, Avatar, Men in Black and other Hollywood action tent-poles have been the rock upon which China’s booming multiplex business was built. Even North American duds like Battleship, John Carter and The Mechanic could count on China to shore up their grosses and give them a measure of international respectability.

But during the past year Chinese audience tastes have broadened, and U.S. action films have experienced a lull in popularity that just might be the beginning of a decline.

Since January, 2012, three Chinese language action pictures have crossed the $90 million mark in the PRC, as have two dramas and a comedy, but only one American action film, Mission Impossible 4, has managed the same feat. And that was a year ago.

Since then, Sherlock Holmes 2, Spy Kids 4D, Wrath of the Titans, Ghost Rider 2, The Avengers, The Grey, The Hunger Games, The Amazing Spider-Man, The Dark Knight Rises, and Prometheus have all under-indexed in China. And the first Hollywood action release of 2013, Skyfall, has joined the club.

The trend is clear: since May, 2012, more than two-thirds of U.S.-made action films released in China have under-indexed. Chinese audiences have increasingly turned toward comedies like Lost in Thailand, to Chinese action films like CZ12, and to effects-driven fantasies like Life of Pi and Painted Skin: Resurrection.

The trend could turn back this month, with Tom Cruise’s Jack Reacher and The Hobbit set to open in a few weeks, but I expect another Chinese film, Stephen Chow’s action comedy Journey to the West, will out-earn both of them. And meanwhile Cloud Atlas, a decidedly non-action film, looks likely to strongly over-index in China and perhaps surpass its U.S. total of $27 million.

The challenges for Hollywood action tent-poles are threefold:

1. Oversaturation. In 2011 there were 14 Hollywood action films released in China. In 2012 there were 23. Audiences may simply be tiring of these movies, with the trend away from action tent-poles signaling a broadening in their tastes. Ice Age: Continental Drift and Life of Pi outgrossed all but two of these 23 films. In a year when China’s box office revenue rose 30 percent and the average U.S. film’s China revenue was up 27 percent, the average U.S. action film’s take rose by only 14 percent.

2. Market Manipulation. In its efforts to manage the market and maintain a face-saving 50 percent share for domestic films, SARFT’s ‘domestic film protection’ efforts seem to be targeting U.S. action flicks more than other foreign pictures. SARFT slotted The Dark Knight Rises and The Amazing Spider-Man for release on the same day, and Oz: The Great and Powerful and A Good Day to Die Hard appear to be headed for the same fate. While China isn’t exactly turning these movies away, it does seem to be more ambivalent about them than, say, family-friendly fare.

3. Piracy. Virtually all movies are affected by theft and illicit distribution in China, but Hollywood action tent-poles seem to be targeted more than others. Franchise films like the Bond, Mission Impossible, Transformers and other pictures tend to be highly valuable to pirates because they have widespread pre-release awareness, and in many cases SARFT delays these films for censorship or ideological reasons, allowing pirates a head start for getting illegal DVDs, Blu-ray discs, and online copies of the films into general circulation.

For these reasons, Hollywood studios looking to maximize their revenues in the increasingly important Chinese market would do well to broaden their offerings so they’re not overly action heavy. Fox, by far the best performing studio in China last year, had the most genre-balanced slate, with Titanic 3D, Life of Pi, and Ice Age ranking as its top three performers. The studios that fell behind in China were far more action-oriented in their China releases. These distributors ought to consider following Twentieth’s example.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.

Wong Kar-Wai’s Grandmaster, starring Tony Leung and Zhang Ziyi, opened with $25.8 million in its first six days in China, extending a record-smashing 7-week run during which at least one film every week has grossed $25 million or more at the Chinese box office. The film, an action-biopic about Bruce Lee’s legendary trainer and kung fu master Ip Man, beat out long-running hits CZ12 and Lost in Thailand last week to top the charts.

Director Wong, notorious for his budget and schedule overruns, out-did his tardiness record this time with a film that he first publicly announced all the way back in 2002. He released the picture’s first teaser trailer in summer, 2010, and pushed back several release dates as he tinkered with the film in post production. After missing his December 18th release date, he was reportedly still putting finishing touches on the film just hours before its eventual world premiere on January 6th. The first-week grosses would have been higher except that the film arrived at least a day late at many theaters.

Still, the wait was apparently worth it, as Grandmasters drew more than 4.5 million admissions and was critically well received, with reviewer James Marsh calling it “the best-looking martial arts film since Zhang Yimou’s Hero, and the most successful marriage of kung fu and classic romance since Crouching Tiger, Hidden Dragon.”

In second place for the week, Jackie Chan’s action-comedy hit CZ12 added $13 million to solidifiy its standing as the mainland’s second-highest grossing Chinese language film ever after Lost in Thailand, with a 25-day cume of $127.1 million.

In its fifth week of release, Lost in Thailand fell 72 percent to $8.9 million, a surprisingly sharp drop that raises the question as to whether it can beat Avatar for China’s all-time box office record. Lost already holds the admissions record with over 38 million tickets sold, but Grandmaster’s dominant opening last week may just have ruined Lost in Thailand‘s chance to become the first Chinese film in the modern multiplex era to take the mainland’s all-time box office revenue crown. Lost needs another $17 million to achieve that distinction, and with Grandmaster stealing its thunder last week and with the James Bond pic Skyfall entering the picture next week, Lost in Thailand, the little ($4 million budgeted) picture that could, may not have enough steam left to push it over the top.

Skyfall‘s release on January 21 will bring an end to the nearly two month long SARFT blackout on major Hollywood releases. The Bond pic can be expected to perform well, though it will undoubtedly be hurt by SARFT’s two-and-a-half month delay in releasing the film, a lag which has allowed massive illicit pirating and online viewing that will cut into the film’s theatrical potential. Still, at least Skyfall won’t be subject to the simultaneous release with The Hobbit that many had feared; that picture has been held back in the PRC until late February.

There are numerous American film releases ahead with strong market potential, but don’t expect a repeat of 2012’s first half, when Hollywood seized a 63 percent share of the market. SARFT won’t be caught off guard this time, and will be doing everything it can to maintain the respectable appearance of a 50 percent or better market share for Chinese language movies.

Robert Cain is a producer and entertainment industry consultant who has been doing business in China since 1987. He can be reached at rob@pacificbridgepics.com and at www.pacificbridgepics.com.